Credit Management and the Evolving Role of Middle Management

By David Schmidt

McKinsey & Company partners Emily Field and Bryan Hancock, along with senior partner Bill Schaninger, discussed their new book, Power to the Middle: Why Managers Hold the Keys to the Future of Work (Harvard Business Review Press, 2023) in an interview with McKinsey Global Publishing’s Lucia Rahilly,  In their book, the authors posit that middle managers play a critical role in vision creation, coaching, and skill development. Moreover, the authors believe middle managers share the often-overlooked responsibility of promoting connectivity and creativity across the enterprise along with the executive management team.

In this interview, the authors discuss the crucial role of middle managers in organizations and the need to empower and develop them. The author’s aim is to solve the problem of undervaluing managers and their unique contributions. They highlight the importance of managers in delivering results, coaching and developing their teams, and navigating the complexities of value creation in rapidly changing markets.

“A middle manager is somebody who has managers who sit below them and managers who sit above them. So, they are there ‘in the middle’ of the organization, not necessarily leading people day-to-day but leading teams.” - Bryan Hancock.

The authors define middle managers as individuals with managers below and above them, positioning them in the middle of the organizational hierarchy. They emphasize the significance of middle managers in translating senior leadership visions into actionable work for their teams. Middle managers often face the challenge of transitioning from being individual contributors to leading and coaching others, which requires a different set of skills.

“Over the past 20 years, managers have increasingly been asked—and increasingly valued—not for their management but for their individual-contributor work. And given the complexities of the future of work, we need to flip that around. We need to get managers back to managing.” - Bryan Hancock

One of the issues discussed is that middle managers often lack the necessary training and support to be effective people managers. They are often promoted based on their technical expertise rather than their management capabilities. As organizations evolve, the authors argue that excellence in coaching, developing people, fostering connectivity, and demonstrating creativity become more important than individual skills. They suggest identifying and promoting individuals based on their potential as managers rather than solely on their technical proficiency.

The authors also advocate for creating career tracks allowing individuals to excel as contributors without being forced into management roles. They emphasize the importance of recognizing and rewarding individuals who excel in their respective areas of expertise without assuming managerial responsibilities.

The interview highlights some common challenges middle managers face, including organizational bureaucracy and burnout. Middle managers are often overwhelmed with administrative tasks and bureaucratic processes, leaving less time for people management. The authors stress the need to reduce administrivia and allow managers to focus on developing their teams and driving outcomes.

“In plain language, administrivia means too much process, too much paperwork, too many meetings, and too much performance by attendance.” - Bill Schaninger.

The COVID-19 pandemic has further highlighted the importance of middle managers. With remote work becoming prevalent, managers played a crucial role in ensuring teams remained connected, motivated, and productive. However, the authors note that managers have regularly faced burnout and often lacked support for their well-being.

The interview concludes by emphasizing the need for managers to intentionally build relationships with their team members, regularly check in on their well-being, and provide resources and support when needed. Organizations can therefore create more resilient and successful teams by investing in middle managers and their development.

“Managers have to be very intentional. They have to make the time, have the recurring one-on-one meetings, and ask people, ‘What are you working on? What are your goals? What are the things that you want to get better at? And, importantly, what gives you energy? What do you care about?’” -Emily Field

Overall, the authors stress the critical impact of middle managers in vision creation, coaching, and skill development. They shed light on the often-overlooked role of middle managers in promoting connectivity and creativity within organizations.

More often than not, Credit Department Managers fit the definition of a middle manager. And, more often than not, Credit Department Managers have attained their position because of their technical skills. This alone highlights the need for credit executives to not only keep building their credit expertise but also to allocate the time and effort to grow their management skills. If you can help your team members be more productive, everybody wins.